E6-14 (Algo) Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO6-2 Casilda Company uses the aging method to estimate bad debt expense. Casilda estimates that 4% of receivables that are not yet due, 13% of receivables that are up to 180 days past due, and 31% of receivables that are more than 180 days past due will be uncollectible. The company currently has $50,300 of accounts receivable that are not yet due, $14,100 that are up to 180 days past due, and $5,700 that are more than 180 days past due. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $100 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how gross accounts receivable, the allowance for doubtful accounts, and net accounts receivable should be shown on the December 31 balance sheet.

E6-14 (Algo) Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO6-2 Casilda Company uses the aging method to estimate bad debt expense. Casilda estimates that 4% of receivables that are not yet due, 13% of receivables that are up to 180 days past due, and 31% of receivables that are more than 180 days past due will be uncollectible. The company currently has $50,300 of accounts receivable that are not yet due, $14,100 that are up to 180 days past due, and $5,700 that are more than 180 days past due. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $100 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how gross accounts receivable, the allowance for doubtful accounts, and net accounts receivable should be shown on the December 31 balance sheet.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Saved Help Save E6-14 (Algo) Recording and Reporting a Bad Debt Estimate Using Aging Analysis LO6-2 Casilda Company uses the aging approach to estimate bad debt expense. The ending balance of each account receivable is aged on the basis of three time periods as follows: (1) not yet due, $51,600; (2) up to 180 days past due, $15,300; and (3) more than 180 days past due, $4,200. Experience has shown that for each age group, the average loss rate on the amount of the receivables at year-end due to uncollectibility is (1) 3 percent, (2) 12 percent, and (3) 32 percent, respectively. At December 31, the end of the current year, the Allowance for Doubtful Accounts balance is $300 (credit) before the end-of-period adjusting entry is made. Required: 1. Prepare the appropriate bad debt expense adjusting entry for the current year. 2. Show how the various accounts related to accounts receivable should be shown on the December 31, current year, balance sheet. Complete this question by entering…
Entry for bad debt expenses
Chapter 5: Receivables and Sales A company reports the following amounts at 12/31/YR2 (before any year-end adjustment). Management estimates 8% of the receivables will not be collectible. The company uses the percent-of-receivables method to determine bad debt expense. Credit sales for the year 1,000,000 Accounts receiyable (A/R) 90,000 Allowance for uncollectible accounts ("AUA") 1,800 Credit Bal. Estimated percent uncollectible. 6.0% Create T accounts for A/R, AUA and Bad debt expense to help with the following questions. Accounts Receivable AUA Bad Debt Expense How much of the Accounts Receivable does management not expect to collect? What amount will the company record as bad debt expense for the YR2? What amount will be shown on the 12/31 balance sheet for Net Accounts Receivable? 1 2 3 On January 5, YR3, the company writes off an A/R they determined is uncollectible. After the write off, what is the balance in AUA? The 4 amount of the write-off is: 200 After the write off, what…
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Bad Debt Expense: Percentage of Credit Sales Method Bradford Plumbing had the following data for a recent year: Credit sales $547,900 Allowance for doubtful accounts, 1/1 (a credit balance) 8,740 Accounts receivable, 1/1 42,340 Collections on account receivable 489,770 Accounts receivable written off 14,250 Bradford estimates that 2.7% of credit sales will eventually default. Required: 1. Compute bad debt expense for the year (rounding to the nearest whole number).$fill in the blank 1 2. Determine the ending balances in accounts receivable and allowance for doubtful accounts. Ending Balance Accounts receivable $fill in the blank 2 Allowance for doubtful accounts $fill in the blank 3
BE9-4 At the end of 2017, Carpenter Co. has accounts receivable of $700,000 and an allowance for doubtful accounts of $54,000. On January 24, 2018, the company learns that its receivable from Megan Gray is not collectible, and management authorizes a write-off of $6,200. (a) Prepare the journal entry to record the write-off. (b) What is the cash realizable value of the accounts receivable (1) before the write-off and (2) after the write-off? 11
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E6-21 (Algo) Recording, Reporting, and Evaluating a Bad Debt Estimate Using the Percentage of Credit Sales Method LO6-2. During the current year, Robby's Camera Shop had sales revenue of $160,000, of which $57,000 was on credit. At the start of the current year, Accounts Receivable showed a $20,000 debit balance and the Allowance for Doubtful Accounts showed a $1,100 credit balance. Collections of accounts receivable during the current year amounted to $55,000. Data during the current year follow: a. On December 31, an Account Receivable (J. Doe) of $1,800 from a prior year was determined to be uncollectible; therefore, it was written off immediately as a bad debt. b. On December 31, on the basis of experience, a decision was made to continue the accounting policy of basing estimated bad debt losses on 3.0 percent of credit sales for the year. Required: 1. Prepare the required journal entries for the two items on December 31, the end of the accounting period. 2. Show how the amounts…
13. Khaled Company provides for bad debts expense at the rate of 4% of credit sales. The following data are available for 2011: Allowance for doubtful accounts, 1/1/11 (Cr.) $ 12,500 Accounts written off as uncollectible during 2011 9,500 Credit sales in 2011 1,250,000 The balance for Allowance for doubtful accounts, 31/12/11 (Cr.) * (2 Points)
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es E6-11 (Algo) Determining Financial Statement Effects of Bad Debts Using the Percentage of Credit Sales Method LO6-2 During the current year, Sun Electronics, Incorporated, recorded credit sales of $740,000. Based on prior experience, it estimates a 2 percent bad debt rate on credit sales. a. On November 13 of the current year, an account receivable for $270 from a prior year was determined to be uncollectible and was written off. b. At year-end, the appropriate bad debt expense adjustment was recorded for the current year. Required: Indicate the effects of the transactions in the following table. Indicate the accounts affected and enter decreases to account categories with a minus sign. Transaction a. a. b. b. Assets Liabilities Stockholders' Equity